BIS warns stablecoins threaten monetary stability

The BIS warns stablecoins lack key monetary features, risk fragmenting the global system, and urges development of regulated, tokenized money as a safer alternative.

The Bank for International Settlements (BIS) has raised concerns in its 2026 Annual Economic Report about the rapid growth of the stablecoin market, now valued at approximately $316 billion. According to the BIS, stablecoins—digital assets typically pegged to the US dollar—fail to meet key criteria required for modern money, such as uniqueness, supply elasticity, interoperability, and integrity. The report notes that stablecoins often deviate from their reference value and can encounter redemption issues, making them resemble exchange-traded funds (ETFs) more than traditional currencies. These shortcomings, the BIS argues, undermine their reliability as a form of money. Furthermore, the BIS warns that the proliferation of stablecoins could fragment the global monetary system, erode the monetary sovereignty of emerging economies, and reduce banks’ funding bases, potentially impacting credit availability. The BIS recommends accelerating the development of tokenized money issued by central and commercial banks as a safer, regulated alternative.